The Archdiocese of Washington says it is happy to accept donations in cryptocurrency, even if parishioners cannot physically put Bitcoin in a collection plate. It is believed to be the first Catholic diocese in the United States to announce the capacity.
The archdiocese, which has 655,000 members in the District of Columbia and five Maryland counties, said Tuesday it will use a donation service company to process donations to various Catholic ministries, including the Parish Support Initiative, which helps fund food pantries. of food and hot water. meal programs.
The archdiocese has reported no cryptocurrency donations so far, noting that the option began on July 29. He said any donations will be turned into cash immediately and sent to the church.
Joseph Gillmer, executive director of development for the archdiocese, said by email that while cryptocurrency donations are in a similar category to stock or bond donations, the potential for big-money donations is greater.
“The number of gifts received may be small relative to traditional forms of donation, but the average amount of each gift is likely to be much higher,” he said.
“I see crypto donations as another way donors can support charitable causes,” Gillmer said. “It’s part of a philosophy of making it easier for donors to achieve their philanthropic goals by being as flexible as possible.”
Since peaking at $3 trillion in market value in November, cryptocurrencies have plummeted, according to The Wall Street Journal and other outlets. The Journal noted that the total value of the market had fallen to about $890 billion in the second quarter of this year.
According to cryptocurrency exchange Gemini Trading Group, which tracks data from across the industry, 20% of Americans said they held crypto last year, creating a large pool of potential donors.
“Even though Bitcoin is down over 50% from its peak, if you have people who invested in Bitcoin four years ago, they are still 10x what they were when they bought it,” said cryptocurrency expert David Sacco, an intern in residence. at the Pompea College of Business at the University of New Haven.
An investment of $2,200 in 2018 now amounts to $22,000. Mr. Sacco said that the appreciation could result in a hefty capital gain if that Bitcoin is converted into cash. Donate it to charity, Sacco said, and you’ll get the $22,000 tax deduction even if he spent only a small fraction of that in cash to acquire the asset.
Still, he does not anticipate a flood of cryptocurrency donations to charities.
“I think donating with cryptocurrency is going to be as popular as people using cryptocurrency to buy things,” Sacco said. “It’s there, people use it to generate publicity, but I don’t think there’s a place, whether it’s people buying textbooks with crypto or people donating money, [except] to create a stir.”
Still, 18 months into what the Salvation Army’s Western US region calls its CryptoKettle online, the evangelical organization has secured $121,502 in cryptocurrency donations, an official said.
“It’s a new way for people to give,” said Lt. Col. Kyle Smith, communications secretary for the Salvation Army in Rancho Palos Verdes, California.
He said such donations are occasional, similar to regular giveaways of gold coins in collection bins at shopping malls during the winter holiday season.
Cryptocurrencies, such as Bitcoin and Ethereum, are encrypted data streams that are monitored by members of a secure computer network called a blockchain, which acts as a ledger for transactions.
The Archdiocese of Washington and The Salvation Army selected Engiven, a San Diego cryptocurrency donation services company, to process the donations.
CEO and co-founder James Lawrence said the company has several programs for organizations. Commission fees range from 3% to 4% per transaction and less for those with an annual subscription or “custom” plan, he said.
Lawrence said those fees were analogous to the credit card processing fees nonprofits pay when they accept donations.
“Service fees are just part of the nature of how money moves,” Lawrence said. “If someone donates $1,000 to one of our clients, and Engiven gets 3% of that, or $30, we see that as really good value. The level of complexity involved in sharing and compliance and security is a pretty fair deal for the service on offer.”